If you have loans, it may be the most overlooked place to invest other than TIPS. In fact, I recommend investing in paying off the house you live in before investing in TIPS. Your house is naturally inflation protected because it is a physical item that changes in price with inflation. Not only that, you can actually make a lot of money by paying off your mortgage fast.
I developed a calculator to illustrate this. I have used this calculator to save thousands on my loans.
- A guaranteed return on investment
- Tax-free return
- May actually reduce your existing risk
- Inflation protection in certain circumstances
- Increases cashflow
- Emotional returns